Free Markets, Free People

Daily Archives: September 10, 2009


Fun With Numbers

There were a lot of numbers thrown around in the president’s health care speech the other night. Some of them, unsurprisingly, don’t add up or were at best confusing.

For instance, Obama said 30 million were uninsured. But in the past, he and Democrats have favored the 47 million figure (the figure the Census Bureau claims to be correct). If it is 30 million, I’d love to know where those 17 million got their health care insurance – it might be a good idea to send the other 30 million with them.

But that’s probably not possible because the president said 14,000 Americans are losing their health care insurance every day. So rough back of the envelope math says 2,520,000 (180 x 14,000) more Americans have lost their insurance since he’s been in office.

So is it really 32,520,000 or 49,520,000 uninsured? Or less? Or more?

And as David Freddoso points out, the future’s not so bright either – with 14,000 losing their insurance a day, that means 15,000,000 or so will lose theirs before his plan is enacted in 2013.

No wonder he’s in such a hurry.

Oh, wait – I did say 2013 didn’t I?

Huh … I did.

So why is he in such a hurry?

~McQ


And You Wonder What Fairyland Is Like?

Nancy Peolsi will be the first to tell you that the experts are wrong when they say the public option described by President Obama last night won’t work.

At a separate event, House Speaker Nancy Pelosi told reporters that half the bill “will be paid for by squeezing excesses out of the system” by finding $500 billion in reduced waste, fraud, abuse and redundancy. The rest will be paid for in pay-as-you-go funding and cuts in other spending.

“Squeeze it out of the system, and that means out of the providers and the rest as well,” she said.

She added that despite the price tag, there’s no limit on the help people will receive.

“There’s a cap on what you pay in in premiums. There’s no cap on what you receive back,” Pelosi added.

My guess, given the current state of the Nobel Prize, her prize for economics is in the bag. She’s discovered a condition where price controls work and are in perfect equilibrium with unlimited payouts thereby never leading to funding deficits.

It’s freakin’ magic!

~McQ


Obama’s healthcare joint session may have been a sign of desperation

In any contest, you have certain assets, and your strategy is to use the assets in the most efficient and effective way you can find. In war simulations, for example, you normally don’t use offensive units for defense or vice versa.

But there is a point at which that breaks down. Anyone who has played war simulation games, such as Empire or Civilization, is familiar with the “edge of defeat” problem.

When it looks like you are about to be defeated, you use whatever assets you have at hand because your choices start to go away. Some people call this the use-it-or-lose-it point. If you are defeated, your assets don’t matter anyway, so you might as well use them to try and stave off defeat, even if your odds are not very good and you are using them in normally inappropriate ways.

Addressing a joint session of Congress is one of Obama’s assets. Using it ineffectively degrades the ability to use it again. If he did one once a week, or even once a month, then those speeches would get no more attention than the weekly radio address.

Looking at last night, I couldn’t help but feel Obama used that asset ineffectively. He got some juice out of it, but not much, and even the Democrats concede that it was not a game changer.

That asset is now gone for the purposes of the healthcare debate. If he tries to pull it out before sometime next year, it will be mostly ignored. So I’ve been wondering why he decided to commit that asset, even with a speech that didn’t break any new ground or attempt to dramatically change the terms of the debate in any way I can see.

The most likely possibility is that is that Obama’s overconfidence led him to believe he could get more mileage out of the asset than he did. He may be pretty out of touch with the real source of opposition to his healthcare wishes. He may think it’s just a matter of misunderstanding, and that if we all understood what he wanted better, we would just go along with it. I hate to think he’s that out of touch, but I have to rate that the most likely explanation.

But what if he understands that the opposition has hardened? What if he knows that the bill is in trouble, and he’s caught between the liberal caucus insisting on a public option and the Blue Dogs insisting they won’t vote for it, and just doesn’t know what to do? What if he knows that he’s at the edge of defeat on this, and thinks it will be the defining contest of his presidency?

In that case, it would make complete sense to use any asset at his disposal to try and salvage a win. Using the joint session asset to make a routine speech would be scraping the bottom of the barrel, but what other assets does he have that he hasn’t already used? He used up his strong-arming on many House members over cap-and-trade. He used up his high-pressure sales option in the summer. He used up all his influence with the industry to get concession from them, both monetary and that they would not publicly fight him. (I am wondering where that $150 million pledge by PhRMA went, though.)

If Obama is half as smart as his supporters say, the joint session last night could be a sign of desperation, an indication that he knows he’s losing on this and just can’t think of any other asset to use.

The preferred metaphor for his speech is “doubling down”. But you normally double down when you think you’ve got a pretty good chance of winning. I think a “Hail Mary” metaphor might be more applicable.

If true, that doesn’t mean he’s guaranteed to lose. Sometimes the Hail Mary works. It just doesn’t work that often.


The Gathering Consensus About “The Speech” (Update)

I think The Hill best captures what I’ve been reading in the MSM, on-line and around the blogosphere today as the consensus about the effect of the Obama speech last night:

Still, while the speech once again illustrated the president’s extraordinary oratory skills, it was not a game changer and appears to leave the president with the same quandary: Healthcare has become the pinnacle legislative issue of his first term, but has divided his party in Congress and run into almost universal GOP opposition. Polls suggest Americans are not convinced reform will help their lives and it is unclear whether the legislation Obama seeks will reach his desk.

Obama was expected to take the wheel on healthcare reform after the Democratic-led Congress drove it into a ditch over the summer, but it did not appear he did so.

As he as done throughout 2009, Obama is largely deferring to lawmakers on the details. His address drew laughs from Republicans when he said some details still needed to be worked out.

A Democratic strategist said, “The speech was good, but not transforming,” adding the address “won’t move votes or change what [Obama] called unresolved issues.”

Or, ‘meh’ ….

Interesting that writers, Sam Youngman and Bob Cusak, both point out that Obama had been “expected to take the wheel”, i.e. assume leadership, but didn’t. No real surprise to me.

The Democratic strategist, of course, is pulling his or her punches. The speech, to be good, had to be “transforming”. It wasn’t. Therefore it wasn’t “good.” It was just number 28 in a long line of speeches with unconvincing rhetoric pushing the same stale and discredited programs.

Democrats are back to square one.

UPDATE: Mickey Kaus gives one of the better and more trenchant summaries of the speech out there:

“Obama doesn’t need to get ‘Republicans on board.’ He doesn’t need to get Blue Dog Democrats on board. He needs to get voters on board.” And if there’s any tactic less effective at wooing skeptics than number-fudging insincerity, it’s number-fudging insincerity coupled with attacks on the veracity, motivation, and worldview of the skeptics themselves.

And that is precisely the path Obama took last night.

~McQ


Health Care Speech – The Morning After

As I think about last night’s speech by President Obama, two words kept coming to mind: partisan and combative. The speech was highly partisan, even though he gave lip-service to bi-partisanship. And I thought he was needlessly combative – calling people liars and describing those who disagree in less than flattering terms.

It was not his finest hour. Nor was it a particularly good speech. It seemed to go on forever and that is usually a sign that it isn’t holding the attention of the audience.

As I figured, since I was at a loss as to what else he could do, he attempted to repackage the same old proposals that the country has been rejecting and called it “new and improved”. He promised details, but there were scant few. And that was particularly true in his attempt to describe how he’d pay for the mess.

Let’s look at some quotes:

There are now more than thirty million American citizens who cannot get coverage.

I’m wondering what happened to the 17 million “Americans” that Democrats and Obama have consistently claimed were uninsured. Where did the 47 million uninsured go? Is this an acknowledgment that they’ve been purposely pumping the numbers up for quite some time?

Well the time for bickering is over. The time for games has passed. Now is the season for action.

This is what I mean about needlessly combative. Those who attended townhalls and other gatherings to voice their opinions and protest what the Democrats were trying to pass do not consider what they did to be “bickering” nor do they feel they were engaged in “games”. Those gaming this were the Democrats who tried their hardest to pass this monstrosity without the benefit of debate, without anyone being able to read and digest it and without Republican participation.

That is gaming the system. There’s no rush to do this and pretending there is also falls under “gaming”.

My health care proposal has also been attacked by some who oppose reform as a “government takeover” of the entire health care system. As proof, critics point to a provision in our plan that allows the uninsured and small businesses to choose a publicly-sponsored insurance option, administered by the government just like Medicaid or Medicare.

So let me set the record straight. My guiding principle is, and always has been, that consumers do better when there is choice and competition.

But it has never been Obama’s guiding principle – not when he insists that “choice” and “competition” can only be achieved by introducing a government run entity into the mix while declining to consider other options.

Remove the regulation that prohibits health care insurance providers from selling across state lines, remove the mandates that require the insured to buy coverage they don’t want or need and facilitate the removal of health care insurance from under employers into the open market. All of those moves – which would require little in the way of tax dollars and government intrusion – would actually deliver choice and competition while driving insurance costs down.

Now, I have no interest in putting insurance companies out of business. They provide a legitimate service, and employ a lot of our friends and neighbors. I just want to hold them accountable. The insurance reforms that I’ve already mentioned would do just that. But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. Let me be clear – it would only be an option for those who don’t have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5% of Americans would sign up.

And most experts say that 5% would not be enough to keep such a system fiscally sound and it would eventually have to turn to the government for subsidy. Want a real insurance exchange? See my comments above.

That’s why under my plan, individuals will be required to carry basic health insurance – just as most states require you to carry auto insurance. Likewise, businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers. There will be a hardship waiver for those individuals who still cannot afford coverage, and 95% of all small businesses, because of their size and narrow profit margin, would be exempt from these requirements. But we cannot have large businesses and individuals who can afford coverage game the system by avoiding responsibility to themselves or their employees. Improving our health care system only works if everybody does their part.

Mandatory health insurance – something he said he didn’t believe in during his campaign. So a young person who would prefer to pay for his health care as needed now no longer has a choice.

Key word – choice. Remember Obama’s “guiding principle”. Well he violates it right there. You no longer have a choice. And remember, in the bill now on the House floor, this will involve the IRS fining you if you fail to comply.

Companies are left with no choice as well.

Some of people’s concerns have grown out of bogus claims spread by those whose only agenda is to kill reform at any cost. The best example is the claim, made not just by radio and cable talk show hosts, but prominent politicians, that we plan to set up panels of bureaucrats with the power to kill off senior citizens. Such a charge would be laughable if it weren’t so cynical and irresponsible. It is a lie, plain and simple.

Certainly there are aren’t any literal panels called “death panels” in the pending legislation, but within the structure of the bill (HR 3200) there are certainly plenty of panels which will be determining what constitutes “best care”. The obvious logical argument then says, if they are there to determine what constitutes “best care” and are using the reimbursement mechanism to encourage their recommendations be followed and the refusal to reimburse if they aren’t, then it isn’t at all incorrect to logically conclude that “best care” when it comes to the elderly may conflict with the desired care the family and doctor want to render the patient.

That argument gets to Obama’s claim that he would prevent any bureaucrat, government or insurance, from getting in between you and your doctor.

So is what those are saying about “death-panels” “a lie, plain and simple”? Or is the lie to be found in the entrails of HR 3200 and in the glib assurances of Obama?

As an aside – is a president calling for “civility” really being civil when he calls those who disagree with him liars in a speech before a joint session of Congress?

There are also those who claim that our reform effort will insure illegal immigrants. This, too, is false – the reforms I’m proposing would not apply to those who are here illegally.

See my post on Joe Wilson. He yelled “you lie” for a reason.

To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage affordable for those without it. The public option is only a means to that end – and we should remain open to other ideas that accomplish our ultimate goal. And to my Republican friends, I say that rather than making wild claims about a government takeover of health care, we should work together to address any legitimate concerns you may have.

Once again the combative and dismissive of the right. This was not a speech that really welcomed Republicans into the process. And, I found it amusing when he tried to imply the Republicans weren’t a part of the process because they’d refused to participate, Republican members of Congress waved the three bills they’ve submitted in the House for all to see.

First, I will not sign a plan that adds one dime to our deficits – either now or in the future. Period. And to prove that I’m serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don’t materialize. Part of the reason I faced a trillion dollar deficit when I walked in the door of the White House is because too many initiatives over the last decade were not paid for – from the Iraq War to tax breaks for the wealthy. I will not make that same mistake with health care.

Second, we’ve estimated that most of this plan can be paid for by finding savings within the existing health care system – a system that is currently full of waste and abuse. Right now, too much of the hard-earned savings and tax dollars we spend on health care doesn’t make us healthier. That’s not my judgment – it’s the judgment of medical professionals across this country. And this is also true when it comes to Medicare and Medicaid.

The stated cost is $900 billion. That’s before the CBO looks at it. But of course the CBO can’t look at it until it is written legislation. But the CBO has already dismissed claims that saving of the amount Obama is claiming can be achieved by “finding savings” in “waste and abuse”.

And isn’t it telling that Obama admits that the system he now runs – Medicare – is “currently full of waste and abuse”. If eliminating fraud and abuse is so easy, one would assume a) there’d be none now or b) he could direct waste and abuse be ended now and those savings accrued immediately.

This is a hand-wave at fiscal responsibility. It is a glib nothing which he can stretch into a claim the cost of his proposal is “covered”.

Also remember that the front end of all these plans are loaded with collections, but no health care reform. Reform doesn’t kick in until 2013 – after Obama hopes to be safely reelected. But in the intervening years, we’ll begin to pay for it. Consequently we’ll have 10 years of money and only 7 or 8 years of reformed health care to pay for in that time frame. That means costs will explode after the 10th year and add to the deficit. Point? His proposal will add heavily to the deficit but not until he’s well out of office.

Knowing seniors were very wary of his plans, and he was losing their support, he attempted to win them back:

In fact, I want to speak directly to America’s seniors for a moment, because Medicare is another issue that’s been subjected to demagoguery and distortion during the course of this debate.

More than four decades ago, this nation stood up for the principle that after a lifetime of hard work, our seniors should not be left to struggle with a pile of medical bills in their later years. That is how Medicare was born. And it remains a sacred trust that must be passed down from one generation to the next. That is why not a dollar of the Medicare trust fund will be used to pay for this plan.

And in his next breath he says:

The only thing this plan would eliminate is the hundreds of billions of dollars in waste and fraud, as well as unwarranted subsidies in Medicare that go to insurance companies – subsidies that do everything to pad their profits and nothing to improve your care. And we will also create an independent commission of doctors and medical experts charged with identifying more waste in the years ahead.

These steps will ensure that you – America’s seniors – get the benefits you’ve been promised. They will ensure that Medicare is there for future generations. And we can use some of the savings to fill the gap in coverage that forces too many seniors to pay thousands of dollars a year out of their own pocket for prescription drugs. That’s what this plan will do for you.

Well, first, Medicare part D is the Medicare prescription drug plan, so I have no idea who all these seniors are paying “thousands of dollars a year” for drugs.

As I recall, what Obama is primarily targeting, though he is very careful not to actually mention it, is doing away with Medicare Advantage.

If you’re wondering what Medicare Advantage plans are, you can read about them here. One of the things Advantage plans pay for is prescription drugs.

And, as the website points out, “In addition, you might have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer.

I guess the Advantage plans must be considered one of those “gold-plated” plans.

Also note the promise of yet another bureaucratic panel – so, could continuing care on grandma at some point in time be considered “waste” and a different form of “care” be encouraged? Is it possible that could conflict with what you and your doctor prefer?

Again, nebulous language that can be interpreted and logically extended to mean precisely what Obama denies is in his proposal.

Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan.

This is the oldest claim in politics and the most bald-faced of its lies.

Obama mentioned demonstration projects for tort reform (and I am glad to see tort reform at least on the edge of the table). I’ve got an idea for a real demonstration project – if it is so easy to reduce the “waste and inefficiency” in Medicare and Medicaid, you have 3 years in which to do it. And once you’ve been successful and that success is unequivocally documented, then come back to us and we’ll talk about further reform.

Overall, as mentioned, not his finest speech. In fact, probably one of his poorer speechs. There was a measure of arrogance that was unattractive. There was a feeling that he wasn’t trying to convince but instead dictate. Nothing I heard last night was new. Nothing I heard last night was particularly compelling in terms of making a convincing argument for doing what he contends we must do.

Instead I heard frustration voiced in surly combativeness. That’s not the way to convince your opposition to see things your way. Leadership was again missing in a speech and moment that practically begged for it.

~McQ


CNN Tries To Spin A “Win” For Obama’s Speech

The good old media waterboy comes through again. Immediately after the speech last night, CNN released the following:

Two out of three Americans who watched President Barack Obama’s health care reform speech Wednesday night favor his health care plans — a 14-point gain among speech-watchers, according to a CNN/Opinion Research Corporation national poll of people who tuned into Obama’s address Wednesday night to a joint session of Congress.

Wow … hot stuff huh? You’d think that the magic was back and the silver tongued orator had done it again wouldn’t you? Of course had you bothered to go to the third paragraph you might have become a little uneasy with the result:

The audience for the speech appears to be more Democratic than the U.S. population as a whole. Because of this, the results may favor Obama simply because more Democrats than Republicans tune into the speech.

And had you then made the “jump” and read the second half of the report, you’d have been downright suspicious of the poll’s results.

The CNN/Opinion Research Corporation poll was conducted just before and just after the president’s speech, with 427 adult Americans questioned by telephone. The survey’s sampling error is plus or minus 5 percentage points.

The sample of speech-watchers in this poll was 45 percent Democratic and 18 percent Republican. Our best estimate of the number of Democrats in the voting age population as a whole indicates that the sample is about 8-10 points more Democratic than the population as a whole.

A 427 sample, loaded with Democrats and a plus or minus 5% sampling error?

Does the word “disregard” say it all?

~McQ